June 24, 2025 - The following recommendations will fast-track America’s investment in data centers and usher it into the next era of innovation. Collaboration among federal agencies, state governments, and tribal governments will enable the rapid construction of data centers in historically coal-reliant communities. Together, they will bring prosperity back to American communities left behind after the decline in the coal industry by investing in their energy capacities, economies, and workforce. 

Recommendation 1. Establish a Federal-State-Tribal Partnership for Site Selection, Utilizing the Department of the Interior’s (DOI) Abandoned Mine Land (AML) Program. 

The first step in investing in data centers in coal communities should be a collaborative effort among federal, state, and tribal governments to identify and develop data center pilot sites on reclaimed mine lands, brownfields, and tribal lands. The Environmental Protection Agency (EPA) and the Department of the Interior (DOI) should jointly identify eligible sites with intact or near-intact infrastructure, nearby energy generation facilities, and broadband corridors, utilizing the Abandoned Mine Land (AML) Reclamation Program and the EPA Brownfields Program. Brownfields with legacy infrastructure should also be prioritized to reduce the need for greenfield development. Where tribal governments have jurisdiction, they should be engaged as co-developers and beneficiaries of data centers, with the right to lead or co-manage the process, including receiving tax benefits from the project. Pre-law AMLs (coal mines that were abandoned before August 3, 1977, when the SMCRA became law) offer the most flexibility in regulations and should be prioritized. Communities will be nominated for site development based on economic need, workforce readiness, and redevelopment plans.

State governments and lawmakers will nominate communities from the federally identified shortlist based on economic need, workforce readiness and mobility, and redevelopment plans.

Recommendation 2. Develop a National Pilot Program to Facilitate a GIS-based Site Selection Tool

In partnership with private sector stakeholders, the DOE National Labs should develop a pilot program for these sites to inform the development of a standardized GIS-based site selection tool. This pilot would identify and evaluate a small set of pre-law AMLs, brownfields, and tribal lands across the Appalachian, Interior, and Western coal regions for data center development.

The pilot program will assess infrastructure readiness, permitting pathways, environmental conditions, and community engagement needs across all reclaimed lands and brownfields and choose those that meet the above standards for the pilot. Insights from these pilots will inform the development of a scalable tool that integrates data on grid access, broadband, water, land use, tax incentives, and workforce capacity.

The GIS tool will equip governments, utilities, and developers with a reliable, replicable framework to identify high-potential data center locations nationwide. For example, the Geospatial Energy Mapper (GEM), developed by Argonne National Laboratory with support from the U.S. Department of Energy, offers a public-facing tool that integrates data on energy resources, infrastructure, land use, and environmental constraints to guide energy infrastructure siting. 

The DOE, working in coordination with agencies such as the Department of the Treasury, the Department of the Interior, the Bureau of Indian Affairs, and state economic development offices, should establish targeted incentives to encourage data center companies to join the coalition. These include streamlined permitting, data confidentiality protections, and early access to pre-qualified sites. Data center developers, AI companies, and operators typically own the majority of the proprietary operational and siting data for data centers. Without incentives, this data will be restricted to private industry, hindering public-sector planning and increasing geographic inequities in digital infrastructure investments.

By leveraging the insights gained from this pilot and expanding access to critical siting data, the federal government can ensure that the benefits of AI infrastructure investments are distributed equitably, reaching communities that have historically powered the nation’s industrial growth but have been left behind in the digital economy. A national site selection tool grounded in real-world conditions, cross-agency coordination, and private-public collaboration will empower coal-impacted communities, including those on Tribal lands and in remote Appalachian and Western regions, to attract transformative investment. In doing so, it will lay the foundation for a more inclusive, resilient, and spatially diverse knowledge economy built on reclaimed land.

Recommendation 3. Promote collaboration between states and utility companies to enhance grid resilience from data centers by adopting plug-in and flexible load standards.

Given the urgency and scale of hyperscale data center investments, state governments, in coordination with Public Utility Commissions (PUCs), should adopt policies that allow temporary, curtailable, and plug-in access to the grid, pending the completion of colocated, preferably renewable, energy microgrids in proposed data centers. This plug-in could involve approving provisional interconnection services for large projects, such as data centers. This short-term access is critical for communities to realize immediate financial benefits from data center construction while long-term infrastructure is still being developed. Renewable-powered on-site microgrids for hyperscale data centers typically exceed 100–400 MW per site and require deployment times of up to three years.

To protect consumers, utilities and data center developers must guarantee that any interim grid usage does not raise electricity rates for households or small businesses. The data center and/or utility should bear responsibility for short-term demand impacts through negotiated agreements.

In exchange for interim grid access, data centers must submit detailed grid resilience plans that include:

A time-bound schedule (typically 18–36 months) for deploying an on-site microgrid, preferably powered by renewable energy.

On-site battery storage systems and demand response capabilities to smooth load profiles and enhance reliability.

Participation in net metering to enable excess microgrid energy to be sold back to the grid, benefiting local communities.

Additionally, these facilities should be treated as large, flexible loads capable of supporting grid stability by curtailing non-critical workloads or shifting demand during peak periods. Studies suggest that up to 126 GW of new data center load could be integrated into the U.S. power system with minimal strain if such facilities allow as little as 1% curtailment time (when data centers reduce or pause their electricity usage by 1% of their annual electricity usage).

States can align near-term economic gains with long-term energy equity and infrastructure sustainability by requiring early commitment to microgrid deployment and positioning data centers as flexible grid assets (see FAQs for ideas on water cooling for the data centers).

Recommendation 4. Lay the groundwork for a knowledge economy centered around data centers.

The DOE Office of Critical and Emerging Technologies (CET), in coordination with the Economic Development Administration (EDA), should conduct an economic impact assessment of data center investments in coal-reliant communities. To ensure timely reporting and oversight, the Senate Committee on Energy and Natural Resources and the House Committee on Energy and Commerce should guide and shape the reports’ outcomes, building on President Donald Trump’s executive order to pass legislation on AI education. Investments in data centers offer knowledge economies as an alternative to extractive economies, which have relied on selling fossil fuels, such as coal, that have failed these communities for generations. 

A workforce trained in high-skilled employment areas such as AI data engineering, data processing, cloud computing, advanced digital infrastructure, and cybersecurity can participate in the knowledge economy. The data center itself, along with new business ecosystems built around it, will provide these jobs.       

Counties will also generate sustainable revenue through increased property taxes, utility taxes, and income taxes from the new businesses. This new revenue will replace the lost revenue from the decline in coal over the past decade. This strategic transformation positions formerly coal-dependent regions to compete in a national economy increasingly shaped by artificial intelligence, big data, and digital services.

This knowledge economy will also benefit nearby universities, colleges, and research institutes by creating research partnership opportunities, developing workforce pipelines through new degree and certificate programs, and fostering stronger innovation ecosystems built around digital infrastructure.

Conclusion

AI is growing rapidly, and data centers are following suit, straining our grid and requiring new infrastructure. Coal-reliant communities possess land and energy assets, and they have a pressing need for economic renewal. With innovative federal-state coordination, we can repurpose abandoned mine lands, boost local tax bases, and build a knowledge economy where coal once dominated. These two pressing challenges—grid strain and post-coal economic decline—can be addressed through a unified strategy: investing in data centers on reclaimed coal lands. 

This memo outlines a four-part action plan. First, federal and state governments must collaborate to prepare abandoned mine lands for data center development. Second, while working with private industry, DOE National Labs should develop a standardized, GIS-based site selection tool to guide smart, sustainable investments. Third, states should partner with utilities to allow temporary grid access to data centers, while requiring detailed microgrid-based resilience plans to reduce long-term strain. Fourth, policymakers must lay the foundation for a knowledge economy by assessing the economic impact of these investments, fostering partnerships with local universities, and training a workforce equipped for high-skilled roles in digital infrastructure.

This is not just an energy strategy but also a sustainable economic revitalization strategy. It will transform coal assets that once fueled America’s innovation in the 19th century into assets that will fuel America’s innovation in the 21st century. The energy demands of data centers will not wait; the economic revitalization of Appalachian communities, heartland coal communities, and the Mountain West coal regions cannot wait. The time to act is now.

This memo is part of our AI & Energy Policy Sprint, a policy project to shape U.S. policy at the critical intersection of AI and energy. Read more about the Policy Sprint and check out the other memos here.